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INVESTMENT SECURITIES
 3 Months Ended
Mar. 31, 2013
INVESTMENT SECURITIES  
INVESTMENT SECURITIES

4.   INVESTMENT SECURITIES

 

A summary of available for sale and held to maturity investment securities are as follows:

 

 

 

 

 

Gross

 

Gross

 

Estimated

 

 

 

Amortized

 

unrealized

 

unrealized

 

fair

 

 

 

cost

 

gains

 

losses

 

value

 

 

 

(Dollars in thousands)

 

March 31, 2013

 

 

 

 

 

 

 

 

 

Available for Sale

 

 

 

 

 

 

 

 

 

U.S. Government sponsored entities debt securities

 

$

207,755

 

$

2,343

 

$

—

 

$

210,098

 

States and political subdivisions debt securities

 

193,648

 

2,022

 

(2,044

)

193,626

 

U.S. Government sponsored entities mortgage-backed securities

 

981,911

 

15,876

 

(2,781

)

995,006

 

Corporate securities

 

125,117

 

2,479

 

(61

)

127,535

 

Non-agency collateralized mortgage obligations

 

9,965

 

19

 

—

 

9,984

 

Other

 

751

 

65

 

—

 

816

 

Total

 

$

1,519,147

 

$

22,804

 

$

(4,886

)

$

1,537,065

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity

 

 

 

 

 

 

 

 

 

U.S. Government sponsored entities mortgage-backed securities

 

$

159,363

 

$

452

 

$

(332

)

$

159,483

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

Available for Sale

 

 

 

 

 

 

 

 

 

U.S. Government sponsored entities debt securities

 

$

278,198

 

$

2,741

 

$

—

 

$

280,939

 

States and political subdivisions debt securities

 

184,274

 

2,831

 

(1,194

)

185,911

 

U.S. Government sponsored entities mortgage-backed securities

 

925,018

 

17,548

 

(1,523

)

941,043

 

Corporate securities

 

125,649

 

2,360

 

(63

)

127,946

 

Other

 

866

 

40

 

—

 

906

 

Total

 

$

1,514,005

 

$

25,520

 

$

(2,780

)

$

1,536,745

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity

 

 

 

 

 

 

 

 

 

U.S. Government sponsored entities mortgage-backed securities

 

$

161,848

 

$

695

 

$

(15

)

$

162,528

 

 

The amortized cost and estimated fair value of investment securities at March 31, 2013 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

 

March 31, 2013

 

 

 

Amortized
Cost

 

Estimated Fair
Value

 

 

 

(Dollars in thousands)

 

Available for Sale

 

 

 

 

 

Due in one year or less

 

$

110,289

 

$

110,667

 

Due after one year through five years

 

176,722

 

181,273

 

Due after five years through ten years

 

96,482

 

96,745

 

Due after ten years

 

143,027

 

142,574

 

Mortage-backed securities

 

991,876

 

1,004,990

 

Other

 

751

 

816

 

Total

 

$

1,519,147

 

$

1,537,065

 

 

 

 

 

 

 

Held to Maturity

 

 

 

 

 

Mortage-backed securities

 

$

159,363

 

$

159,483

 

 

We did not sell any available for sale securities during the first quarter of 2013 and 2012.

 

Investment securities of $863.9 million and $905.5 million at March 31, 2013 and December 31, 2012, respectively, were pledged to secure public funds on deposit, securities sold under agreements to repurchase and other long-term and short-term borrowings. None of these securities were pledged to a secured party that has the right to sell or repledge the collateral as of the same periods.

 

Provided below is a summary of the 168 and 118 investment securities which were in an unrealized loss position at March 31, 2013 and December 31, 2012, respectively.

 

 

 

Less than 12 months

 

12 months or longer

 

Total

 

 

 

 

 

Unrealized

 

 

 

Unrealized

 

 

 

Unrealized

 

Description of Securities

 

Fair Value

 

Losses

 

Fair Value

 

Losses

 

Fair Value

 

Losses

 

 

 

(Dollars in thousands)

 

At March 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions debt securities

 

$

106,117

 

$

(2,044

)

$

—

 

$

—

 

$

106,117

 

$

(2,044

)

U.S. Government sponsored entities mortgage-backed securities

 

212,650

 

(3,113

)

—

 

—

 

212,650

 

(3,113

)

Corporate securities

 

23,516

 

(61

)

—

 

—

 

23,516

 

(61

)

Total temporarily impaired securities

 

$

342,283

 

$

(5,218

)

$

—

 

$

—

 

$

342,283

 

$

(5,218

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$

73,128

 

$

(1,194

)

$

—

 

$

—

 

$

73,128

 

$

(1,194

)

U.S. Government sponsored entities mortgage-backed securities

 

206,981

 

(1,538

)

—

 

—

 

206,981

 

(1,538

)

Corporate securities

 

23,205

 

(63

)

 

 

 

 

23,205

 

(63

)

Total temporarily impaired securities

 

$

303,314

 

$

(2,795

)

$

—

 

$

—

 

$

303,314

 

$

(2,795

)

 

Other-than-temporary impairment (“OTTI”)

 

Unrealized losses for all investment securities are reviewed to determine whether the losses are deemed “other-than-temporary.” Investment securities are evaluated for OTTI on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in their value below amortized cost is other-than-temporary. In conducting this assessment, we evaluate a number of factors including, but not limited to:

 

·                  The length of time and the extent to which fair value has been less than the amortized cost basis;

·                  Adverse conditions specifically related to the security, an industry, or a geographic area;

·                  The historical and implied volatility of the fair value of the security;

·                  The payment structure of the debt security and the likelihood of the issuer being able to make payments;

·                  Failure of the issuer to make scheduled interest or principal payments;

·                  Any rating changes by a rating agency; and

·                  Recoveries or additional decline in fair value subsequent to the balance sheet date.

 

The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a general lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized for anticipated credit losses.

 

The declines in market value were primarily attributable to changes in interest rates and disruptions in the credit and financial markets. Because we have no intent to sell securities in an unrealized loss position and it is not more likely than not that we will be required to sell such securities before recovery of its amortized cost basis, we do not consider these investments to be other-than-temporarily impaired.